Amazon’s Appstore: You’ll Make $0 When We Give Your App Away, And You’ll Like It

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Apparently Apple isn’t the only company running an App Store with a penchant for secrecy.

In a blog post this morning, mobile developer Shifty Jelly has publicly called out Amazon for covertly offering the company featured placement on its unofficial Android Appstore as the ‘free app of the day’. This is a well-known promotion that Amazon has openly talked about, but there’s a twist: instead of paying developers 20% of the app’s List Price, which is what it had previously promised, Amazon is asking them to take a 0% rev share. If that’s confusing, read on.

The post, titled ‘Amazon App Store: Rotten to the Core’, recounts how Amazon approached Shifty Jelly with the following secret offer (emphasis Amazon’s):

As you may already know, the Free App of the Day offer placement is one of the most visible and valuable spaces on the Amazon Appstore. We would like to include your app “[name removed]” in our Free App of the Day calendar. We have seen tremendous results from this promotion spot and believe it will bring you a great deal of positive reviews and traffic. It is an opportunity to build your brand especially in association with a brand like Amazon’s. The current price of this placement is at 0% rev share for that one day you are placed.

Now, I vividly remember quizzing the people in charge of Amazon’s Appstore back when it first launched in January. I asked multiple times how exactly their free app of the day promotions would work. And I was very clearly told that even if Amazon decided to make an app free, developers would still be making 20% of their list price. In other words, they’d still make money. So much for that idea.

The results? They ‘sold’ 100,000 copies, for which they received nothing, and the sustained promotion they were promised was unimpressive: “the day after saw a blip in sales, followed by things going back to exactly where we started, selling a few apps a day.” Now Shifty Jelly has to add servers to accommodate thousands of new users and has hundreds of additional support requests, with no additional revenue to show for it.

It’s completely ridiculous that Amazon publicly talked about giving developers 20% of the List Price only to later ask them to accept a worse deal — and that they’re now “putting really restrictive clauses at the bottom of their emails, saying that no one is even allowed to discuss these back door deals they are doing.”

That said, Shifty Jelly still had to agree to the new terms before the offer launched, and it’s not as if they just gave the application away to 100,000 people who would have otherwise paid for it — their report indicates that they were only selling a handful of apps on most days.

Other developers should take note: Amazon’s promised “tremendous results” may not do much to help your bottom line. We’ve reached out to Amazon for comment.

For some background, here’s how Amazon’s pricing system works (from my previous post):

The biggest departure from the mobile app stores we’ve grown accustomed to involves pricing. Unlike Apple’s App Store and Android Market, where developers can set their price to whatever they’d like, Amazon retains full control over how it wants to price your application. The setup is a bit confusing: upon submitting your application, you can set a ‘List Price’, which is the price you’d normally sell it at. Amazon will use a variety of market factors to determine what price it wants to use, and you get a 70% cut of the proceeds of each sale (which is the industry standard). In the event that Amazon steeply discounts your application, or offers it for free, you’re guaranteed to get 20% of the List Price.

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OverviewAmazon is an e-commerce retailer formed originally to provide consumers with products in two segments. It offers users with merchandise and content purchased for resale from vendors and those offered by third-party sellers.
Operating in North American and International markets, Amazon provides its services through websites such as amazon.com and amazon.ca. It also enables authors, musicians, filmmakers, …